Sobeys Buys Canada Safeway

[jamcool]

They were private in the past (under KKR)

[Alpha8472]

Safeway should go private again.

As a public company, Safeway answers to the shareholders. All the shareholders care about is the stock price. The shareholders want the company to lay off people and raise prices to increase the margins and make the stock price go up.

Going private would allow Safeway to have the freedom to run the business well and cater to the customers. It is time to increase staffing levels and keep those prices low. Customers already complain about the long lines at Safeway due to limited staffing. The shelves are empty and frequently run low because there are not enough employees to stock shelves. The low prices are needed to keep loyal customers. Shorter lines will also help to retain the customers. If prices go up and staffing gets cut, Safeway will lose tons of customers to other stores and supermarkets.

Walmart is already suffering from staffing cuts. Shelves are out of stock due to employees getting cut or being reduced to part time. Merchandise is piling up in warehouses and backrooms. Customers are complaining left and right about empty shelves. They are fleeing to Target, which has maintained good staffing levels. Target hires lots of cashiers and lots of employees to stock the shelves. The shelves at Target are well stocked and the lines at the registers are short. Walmart is suffering and doesn't understand that cutting staff will hurt them in the long run. Save a little bit of money on employee payroll and you lose a ton of customers to other stores.

[marshd1000]

Here is the latest. The buyout of Canada Safeway by Sobey's has been approved.

Here is the story:

http://www.cbc.ca/news/business/sobeys- ... -1.2159468

[marshd1000]

The Canada Safeway purchase by Sobeys has been finalized. Here are the details:

http://business.financialpost.com/2013/ ... f-safeway/

[marshd1000]

Sobeys has found buyers for the stores that they agreed with the Canadian government to get rid of. They also added some stores that they were not required to get rid of. But it looks like the Safeway banner on Vancouver Island will be gone. The Safeway stores there are going to become Save On Foods.

http://www.timescolonist.com/business/a ... p-1.853373

[Alpha8472]

Save On Foods actually has nice decor. Safeway stores are dark and feature a brown look while Save On Foods is bright and vibrant. Save On Foods is known for their spectacular glass front stores. I think that Save On Foods will refresh these dingy Safeway stores and make changes for the better.

http://www.country95.fm/dataimages/Save ... %20016.jpg

http://www.myuptown.ca/shop/save-on-foods/#

[storewanderer]

I was in BC last week and went to a lot of Safeway Stores. Great stores. All were lifestyle format, the perimeters looked 10x better than the US Stores (better mix, better staffing levels, better pricing relative to competition, great freshness and quality; they basically sell the same items as the US Stores but in more variety, much more, in the fresh departments). The center store areas were also good, pricing was lower than other conventional stores (Thrifty Foods (Sobeys) or Save On Foods) but higher than Wal Mart or Superstore (Loblaw). Safeway's stores were far busier than Thrifty or Save On and looked WAY better. I was least impressed with Thrifty Foods and I hate to think what will happen to Safeway under this Sobeys group, after seeing that store.

Some of the US issues were there. Cheaply done lifestyle remodels, for example, with duct tape holding floor tiles together, something I've seen in a handfull of US Stores, I saw in one lone Canada Store too.

It is interesting to me Safeway was able to maintain the Canada operation at a higher level than the US Stores. I think a big part of this is that they have to sell different merchandise in Canada due to the packaging requirements, you can't just bring US items up to Canada. That forced Safeway to allow merchandising decisions to take place at the local Canada level and it seems that division kept doing well as Safeway ran its US Stores into the ground through too many centralized decisions and merchandising was really at the heart of that misstep, which led to lower store volumes, which in turn caused the staffing and pricing issues Safeway US has.

But it is over. Sobeys is moving Canada Safeway onto its systems and I am sure the lines will start to blur more between the US and Canada Safeway Stores.

Sobeys has a great front end system, by the way. They are in the process of installing this system in the Safeways. If you pay with a card they have to know what card type (debit or credit), then what card issuer (for instance, they ask debit or credit, then when you say credit, the cashier has to input into the register if it is a Visa, Mastercard, etc. and only then can you swipe the card after all that, after everything is scanned). The Safeway Canada system (and the system at every other store I went to in Canada) was like the Safeway US system, the customer swipes a card at any time during the transaction, and the cashier presses one button on the register (card tender or something) and from there the customer does the rest and the card processes. Also Sobeys uses 5-digit PLU codes for bakery while Safeway uses 4-digit codes. Another inefficiency.

[marshd1000]

From time to time I have been looking at the Canada Safeway website to see signs of integration with Sobeys. I don't know when it actually began, but I was looking at the online ads and I am now seeing "Compliments" products on the Safeway ads. I know that "Compliments" is the Sobeys brand. So while I think it is entirely possible for Sobeys to keep the Safeway banner in Western Canada, I am not so sure about the brands in the stores. Looking at the Sobey's website, they seem to have a strong private label program. A couple Safeway brands that I could see them keeping is Lucerne for dairy and possibly Eating Right. I was seeing that "Compliments" is used for higher quality foods and healthier choices. So there may be a possibility for them to use the "Eating Right" brand as a separate nutritional brand to differentiate those products from "Compliments". But it is also possible that we could see a transition away from any Safeway US brands. They could be just waiting to use up all stock of products that have already been manufactured or using up packaging that was already made up.

[storewanderer]

I think there is a transition agreement so there may be a certain time period the Safeway brands continue to be supported in Canada but that may be coming to an end. Sobeys is integrating the stores onto their systems as we speak. I am sure merchandising changes are coming. What a shame. Believe me. I saw Sobeys programs in a Thrifty Foods on merchandising and it was not nearly as good as the Safeway Canada programs.

I noticed Sobeys had switched bakery bags in some stores. Safeway had bakery bags pretty similar to the US ones, plastic with an item list and PLU codes. The new Sobeys bakery bags were generic ones like you'd see in an independent store with no item/PLU code list.

I hate to be negative but I am not impressed with what I saw of Sobeys...

[Alpha8472]

Sobeys is closing 50 underperforming stores in the wake of its Canada Safeway acquisition. The cost savings will improve earnings in the future. Most of the closures are in Western Canada where the Safeway stores are located. Most likely the Safeway stores are much nicer and more profitable than stores already run by Sobeys.

http://supermarketnews.com/retail-finan ... s-q4-sales